One of Scotland's biggest housing associations has struck the first deal of its kind with an institutional investor to access £45million of long-term financing.

Link Group has attracted M & G Investments into the social housing sector after years of government lobbying for infrastructure investment from pension funds and other institutions.

M & G says it is "the first bilateral investment in a Scottish housing association by a long-term institutional investor". The 31-year fixed rate financing will enable Link Group to refinance its bank debt. Link's chief executive Craig Sanderson said the body continued to deliver more than 200 new homes a year and could now accommodate many more families in housing need.

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Clive Barnett, managing director housing finance at RBS, said it was the first private placement funding for a housing association in Scotland. "It offers long-term security, facilitates growth and complements the continuing loan funding provided to Link by RBS."

The National Association of Pension Funds has said its members are "increasingly interested in social housing as a form of investment, attracted by the higher yields when compared with the current low yields of inflation-linked gilts".